Investing.com – “While the official agenda revolved around slowing economic growth, rising debt, and international conflicts, attendees were particularly excited about Trump, given his proposals for tariffs, tax cuts, and increased debt issuance.” Much attention has been paid to the potential consequences of the return of measures that could generate significant economic consequences.
IG market analyst Sergio Avila analyzes Donald Trump’s possible return as US president, raising notable concerns among world economic leaders who met in Washington last week. That’s what he says. Annual Meetings of the International Monetary Fund (IMF) and the World Bank.
“Mr. Trump’s rise in the polls has eroded the initial advantage that Democratic candidate Vice President Kamala Harris had, and has alarmed Treasury secretaries, central bankers, and economic experts, raising concerns about President Trump’s chances. “I’m watching the new Trump administration with concern about its aggressive economic policies,” Avila said.
Tariffs and tax breaks
“Among their plans stands out the imposition of a 10% tariff on all imported goods and a 60% tax on products from China, which will lead to retaliatory trade that will impact global supply chains. This could lead to a war. German Finance Minister Christian Lindner pointed out that “measures of this kind could only have negative consequences for both sides in the trade dispute between the United States and the European Union.” the house added.
“President Trump is also proposing sweeping tax cuts, including an extension of the 2017 personal tax cut, as well as tip taxes and retirement savings. However, budget experts believe these measures will reduce the U.S. “We estimate that debt will increase by $7.5 trillion over the next 10 years,” says Avila.
“In contrast, for many analysts, Harris’s presidency represents a continuation of Biden’s multilateral policies, which focused on cooperation on the environment, debt relief, and international tax regulations. To a lesser extent, it will also be accompanied by an increase in public debt,” says the IG analyst.
Market impact
“Trump’s possible return also has an impact on financial markets, which have moved in favor of assets driven by Republican policy, such as stocks, cryptocurrencies, and cryptocurrencies in anticipation of a Trump victory. This trend coincides with the strengthening of the dollar, which recorded its biggest advance in more than two years in October,” warns Sergio Avila.
“This strong dollar is worrying some emerging markets, as it generally makes debt and financing costs more expensive for developing countries,” Brazil’s central bank president Roberto Campos Neto said. He stressed that bets in the president’s favor are already impacting long-term interest rates “in dollar-sensitive economies,” he notes.
“The outlook for global tariff policy is that global tariff policy could increase prices and complicate disinflation, as expressed by South African Central Bank Governor Lesetya Kganyago. “This process is a key point for central banks to worry about affecting long-term growth,” the expert said.
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